IT Stocks In Focus: Zensar Tech Jumps 13%, Persistent, Coforge Gain As TCS Earnings Lift Sector Sentiment

Shares of midcap information technology (IT) companies traded higher on Friday, July 10, after Tata Consultancy Services (TCS) reported stronger-than-expected June-quarter earnings, boosting sentiment across the broader technology sector.

The Nifty MidSmall IT index rose as much as 2.37% during the session and was trading 2.15% higher at 11:43 am. Buying was broad-based, with 19 of the index's 20 constituents trading in the green.

Zensar Technologies emerged as the top gainer, soaring 13% to ₹507. Persistent Systems, Coforge, Mphasis, Sonata Software, Oracle Financial Services Software (OFSS), Sagility and Hexaware Technologies also traded higher, gaining between 2% and 4%.

TCS earnings lift sentiment across the sector

The rally followed TCS' June-quarter results announced after market hours on Thursday.

India's largest IT services company reported a consolidated net profit of ₹13,349 crore for the quarter ended June 2026, up nearly 5% from ₹12,760 crore a year earlier. The company also said its annualised AI revenue run rate reached $2.6 billion during the quarter, while total contract value (TCV) stood at $9.5 billion.

TCS announced several large AI-led deals, including an $800-million business transformation programme with SKF, besides multi-million-dollar engagements with ServiceNow, a Europe-based Fortune Global 50 company and a North American utility company. The deal wins reinforced confidence that enterprise spending on artificial intelligence continues to remain resilient despite an uncertain macro environment.

The stronger-than-expected quarterly performance improved sentiment across the broader IT space, with investors turning their focus to earnings from other software exporters in the coming weeks.

Kotak Neo Research expects a seasonally weaker quarter

According to Kotak Neo Research's Q1FY27 sector preview, the June quarter is expected to be weaker than usual for the Indian IT services sector, despite June typically being a seasonally strong quarter because of additional billing days. Revenue growth is likely to remain muted due to two key factors- the impact of the West Asia geopolitical crisis on client spending and project execution, and the increasing adoption of generative AI, which is improving productivity and reducing the amount of work clients need to outsource.

The report said the impact of geopolitical tensions has been modest, resulting in slower client decision-making, delays in project starts and a slight reduction in discretionary technology spending. While these factors have weighed on revenue growth, they have not caused any severe disruption to the sector.

It also noted that pricing pressure is being cushioned by the depreciation of the rupee, which weakened 2.6% quarter-on-quarter and 9.7% year-on-year during the period. However, the benefit may not immediately reflect in net profit for many companies because of cash-flow hedging.

Management commentary to remain in focus

With the earnings season underway, investor attention is expected to shift beyond the June-quarter numbers to management commentary on business conditions and demand trends.

According to the report, key monitorables include discretionary technology spending, the pace of client decision-making, tariff-related uncertainty and the medium-term demand outlook. Investors are also expected to track updates on AI-led opportunities, deal pipelines, hiring trends and revenue visibility over the coming quarters.

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